Shares of metal companies, mainly the steelmakers, were under pressure with Jindal Steel & Power (JSPL), Steel Authority of India (SAIL) and Prakash Industries hitting their 52-week lows on concerns of a slowdown in demand.

At 11:21 am; Nifty Metal index, the largest loser among sectoral indices, was down 3.4% at 3,124 points, as compared to 0.77% decline in the Nifty 50 index. The metal index erased its entire 2% gain recorded in past two trading days after US and Chinese leaders brokered a truce in their trade conflict.

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JSPL, SAIL, Hindalco Industries, Vedanta, NMDC, JSW Steel, National Aluminum, Coal India and Tata Steel from the Nifty Metal index were down in the range of 3% to 6% on the National Stock Exchange (NSE).

Prakash Industries has tanked 10% to Rs 83, its lowest level since April 5, 2017, on the BSE. The stock plunged 47% in past three months, as compared to a 6% decline in the S&P BSE Sensex. It has corrected 70% from its 52-week high level of Rs 276 touched on January 16, 2018.

The company said steel prices witnessed temporary weakness in the last two weeks due to demand disruption on account of Assembly Elections in four major states i.e. Chhattisgarh, Madhya Pradesh, Telangana, and Rajasthan. A slowdown in China's domestic steel demand also impacted the prices.

However, presently, steel prices have started to improve and raw material prices (iron ore and coal) have come down, thereby securing the profitability of the Company, Prakash Industries said in a press release on December 1, 2018.

According to Moody's Investors Service, in 2019, demand for steel in Asia will likely stay at levels similar to that in 2018, indicating a softening from the robust growth seen in 2018.

"As for profitability, rated Asian steelmakers will see their profitability levels weaken mildly because of a decline in Chinese demand growth but stay strong overall," says Kaustubh Chaubal, a Moody's Vice President and Senior Credit Officer.